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Did Michigan waste $3.5 million on charter schools with questionable futures?

Ghost tales

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A review by MT of the applications of the 11 other states' education agencies that received Charter Schools Program grants in 2010 showed that none of them said they would give planning grants to school teams without authorization. In fact, most required approval of an authorizer as a prerequisite in order to ensure the grants went to schools with a real future ahead.

More specifically, several other states were more specific in how the planning grants would be used. California, for example, requested that Planning and Implementation grants could be used for personnel salaries during the first year of a school's operation, since they knew state funds could sometimes lag and charter schools, unless a major for-profit education management organization runs them, don't have the flexibility to absorb the costs. In Arkansas, planning grants would only go to six teams, and be limited to $10,000. It would also come with technical assistance from the state. Missouri detailed how planning grants would be used for the hiring of an administrator to work on the curriculum, professional development opportunities, the purchasing of media and library materials, and the creation of evaluations.

The tangible goals of these planning grants lay in stark contrast with Michigan's objectives, which divided the planning grant into two parts: $35,000 to refine an academic vision and determine what data it would use to measure success and $75,000 to work on the business plan and finalize a full charter application for an authorizer.

In 2012, WestEd, a San Francisco-based nonpartisan non-profit provided an audit of Michigan's grant program. While it spoke highly of the program's selection process — how it picked which development teams and schools to award grants to — it expressed some confusion in why the state's planning grants were not in fact "pre-planning grants."

In response, Michigan defended its system, explaining that, "most development teams would never receive charter contracts if they didn't have access to the resources from the planning grant."

Flying blind

The Michigan model of giving seed money to the little guys — the teams that wouldn't stand a chance without the planning grants — creates an interesting dilemma. While the grassroots qualities of these teams are coveted, whether or not they have the capacity to open a school on their own — even with extra funds — is debatable. Michigan's amorphous goal of using $110,000 to refine an authorization application makes it even more difficult to assess if funds were used responsibly.

In July 2011, Lois Williams, the former president of Knoxville College in Tennessee, reached out to Lorilyn Coggins, the CEO and founder of American Charter Education Services Inc., a for-profit organization that helps development teams write charter proposals for the MDE grant and for traditional authorization applications.

Williams, who lived in West Virginia but had friends and family in Detroit, wanted to start a museum-based charter school similar to a successful model in place in Avondale, Georgia. The school was to be named after her husband’s mother Bertha B. Williams, the granddaughter of slaves who led a life as an education warrior and advocate.

While Williams felt confident in her idea, she was unfamiliar with the K-12 arena after years in higher education and reached out to the MAPSA for help. They recommended she get in touch with Coggins, who had been involved with the charter sector since the '90s and was working with a number of other development teams.

After several emails and phone conversations, Coggins submitted the grant application, on behalf of Williams, to the state department of education.

In October, they found out Friends of Bertha B. Williams Corp. (every development team had to be a non-profit) would be awarded a $110,000 grant. Coggin wrote her organization into the application’s required budget, as it would be assumed that if/when the program received a grant Coggins’ team would stay on to help refine the application for authorizers and provide board training.

According to documents provided to MT by MDE, in stage one of the planning grant, where recipients receive $35,000, $25,670 went to Coggins’ company, ACES. The line items were vague: “Ongoing Planning Grant Activity” and “Misc. Stage I Planning Grant,” read two of them.

In stage two, when the rest of the funds — $75,000 — were disbursed, ACES took in $36,544.27. Added together, Coggins’ company took in nearly $65,000 of the $110,000 grant.

How MDE views budgets like this unclear. It’s neither good nor bad; it’s simply, as they would say, “allowable.”

When MT asked Coggins for an explanation of where the funds went and why so much went to her company, she was thoughtful, acknowledging that it does sound like a lot.

"So we did board support, which is one thing we got paid for. We also did grant management, which is another piece that we get paid for. And then in the case of the Bertha group I can’t tell you how many phase one applications — the company just kept knocking on doors of authorizers — so there was a bit of money that went behind that. Every time we would do a rewrite it would be a real rewrite," she explains.

In that 2011-12 grant cycle Coggin's company worked with 8 different development teams — two succeeded in opening schools. MT viewed the budget that she created for another team, the Detroit Coalition for Education Excellence, that also failed to start a school and found many of the same trends when it came to ACES invoices.

Of course nebulous spending goes beyond consultants. According to the monthly budgets for the Friends of Bertha B. Williams Corp. $6,000 was allocated to "museum visits." MDE questioned this, however, after Coggins responded with an email about the school's mission of museum-based learning and the board's desire to visit museums for possible partnerships the topic was dropped. It became "allowable." Another expense of note was the amount of the grant that went towards travel. Since Williams lived in West Virginia, funds were spent on flying her to Detroit and then putting her up in hotels. Nearly $10,000 went towards this. Also "allowable." While Coggins expresses sadness that not every school she worked on was able to open — largely blaming the authorizers for this failing — she contends that the planning grants, as MDE designed them, were valuable for the charter sector's progress. "I personally — and this is not because it would benefit me — would love to see more dollars dedicated towards the incubation, think-tank process," she told MT. "I think in the last twenty years charter schools have become more and more like the traditional districts and we haven't done anything to really support innovation."

Williams, who thought she was on the path towards opening an innovative school has mixed feelings. Today, she vacillates between anger, frustration, sadness, and finally incredulity when she thinks back on her experience with the Michigan Department of Education planning grant.

"The funds that were given was an excellent idea, or offer, by the state," she tells MT. "We made a mistake by getting a consultant to work with us. Before we knew anything, the money was gone."

Perhaps if her team had been successful in obtaining an authorizer and opening she wouldn’t have minded giving Coggins’ company so much — it would have paid off. But it hasn’t open and so she is only left with "what ifs," a consequence of any "innovative" endeavor that doesn't take off. The question of course, is whether or not public funds should be going towards such gambles.

Looking ahead

This summer, Michigan's 2010-2015 charter program grant finished, and the department applied for another round of funding. This time Michigan asked for $45 million. They were rejected.

The issue of grant recipients not opening schools didn't come up — why would it, it was "allowable" — but a slew of other problems did.

According to Lori Higgins of the Detroit Free Press, the state's application was rejected because "the state lacks oversight of the authorizers who approve and oversee them," and because of poor academic performance of charter schools in the state.

The department's application received 17 of 45 possible points when it came to oversight of authorizers and 15 out of 30 points for the academic performance of their charter schools. It also scored dismally on its ability to identify success in charter schools and disseminate the practices to other schools.

While development teams not opening schools could have been viewed as a waste of funds, the more pressing issue appears to be what actually happens when these schools do open. Looking at results from the 2015 application, perhaps it's for the best not every development team was successful.

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